DETERMINANTS OF PERFOMANCE OF GEOTHERMAL ENERGY PROJECTS IN KENYA: A CASE OF MENENGAI GEOTHERMAL PROJECT IN NAKURU COUNTY
DETERMINANTS OF PERFOMANCE OF GEOTHERMAL ENERGY PROJECTS IN KENYA: A CASE OF MENENGAI GEOTHERMAL PROJECT IN NAKURU COUNTY
Stanley Ngugi Thuo - University of Nairobi, Kenya
Dr. John Mbugua - University of Nairobi, Kenya
ABSTRACT
Infrastructural development is a key aspect for economic growth and has been on focus by the Kenyan Government. There has been a lot of investment on development of geothermal energy mainly being one of the major sources of electricity in Kenya owing most to the unreliability of diesel operated generators and hydro power sources of energy. In lieu of this the Government formed Geothermal Development Company (GDC) to fast track development of geothermal resources in the country. There has been inefficiency in carrying out performance of geothermal energy projects, how capital costs, shortage of local geothermal energy expertise, infrastructure development, existing legal policies and regulatory framework on the exploitation of geothermal power in Kenya. The purpose of this study was to identify determinants of performance of geothermal energy projects in Kenya. The study specifically focused on effect of capital costs, technical expertise, infrastructural development and legal and regulatory framework on performance of geothermal energy projects in Kenya. This study employed cross- sectional survey research method. The study targeted 1130 respondents comprising of supervisory staff members of GDC; purposive sampling was used in selection of respondents. Questionnaires were used for data collection, after obtaining data from the field and coding, Statistical Package for Social Sciences (SPSS software) was used to analyze the information that was presented in terms of findings and recommendations. This study was carried through a descriptive survey design combining both qualitative and quantitative research strategies. The study population consisted; Top level managers, Middle level managers and Lower level managers. The study sought to establish to what extent capital cost determines performance of geothermal power in Kenya. Additionally, the study established how Geothermal Energy Experts determines the performance of geothermal energy projects in Kenya. The study also established to a very great extent, how Legal and Regulatory Framework determines performance of geothermal energy projects in Kenya. From the findings, infrastructural Development determines the performance of geothermal energy projects in Kenya. The study found that the projects costs for covering staff employees and project managers have increased to cost of the projects; drilling fuel costs are too high for the company; and the cost of purchasing the geothermal equipment affects the performance of the geothermal projects. Further, the study found that the project managers are recruited based on the expertise they have on geothermal projects and technical expertise is required to maintain the adopted technology. The study also found that the organization has proper infrastructural knowhow to handle geothermal projects. The study also found that there is efficient adherence to various rules and laws governing implementation of geothermal projects. The study concluded that capital costs had the greatest effect on the performance of geothermal energy projects, followed by infrastructural development then legal and regulatory framework while technical expertise had the least effect to the performance of geothermal energy projects. The study recommends that funds used for corporate social responsibility, and the procurement costs should be minimized, and the funds diverted to capital intensive areas. This would enhance the recovery of the financial investment from the revenues generated from the systems. In addition, to avoid delays in supply and provision of services, the study recommended for improved infrastructure for easy access to drilling sites, evacuation of steam to power plant.
